Why tea is Chinese to a tee

For all the tea in China: a girl savours the fragrance of tea buds on a plantation in Yichang, Hubei provinceCredit:
Zhang Guo Rong / China Daily

31 May 2016 • 2:00pm

Wang Mingjie in London and Tang Yue in Beijing

Find out how tea became one of China's best-loved exports and how the Chinese tea industry is fighting to keep its place in the world market

The practice of drinking and serving tea has been part of Chinese culture for centuries. The beverage, and its complicated serving ceremony, have inspired poets, writers and artists down the ages. Along with silk, gunpowder, paper and porcelain, the drink is one of the country’s most famous products.

Tea is the world’s most widely consumed beverage after water, and Chinese teas are still highly prized. At its peak, a pre-sale 500-gram batch of West Lake longjing, a renowned roasted green tea, drew a bid of 180,000 yuan (£19,150) at an auction in Hangzhou in 2012. Weight for weight that made the tea 25 per cent more expensive than gold on the day.

However, despite this long and illustrious history, China is no longer the world’s biggest exporter of tea. Last year Kenya was the world leader, with 443,000 tonnes, and China’s 325,000 tonnes secured it second place, the International Tea Committee in London says.

Unlike the Chinese, Europeans and people in the United States prefer black tea to green

What’s more, in the age of multinationals and branding, China is fast losing its name as the cradle of the drink because of a dearth of world-famous brands.

China earned $1.38 billion (£957 million) by exporting those 325,000 tonnes last year, amounting to about $4.2 per kg, almost 40 per cent higher than the price five years ago. But it is more of a result of rising labour costs than the increasing brand value, experts say.

Market demand

As the cradle of tea, China was the world’s sole provider for centuries. However, the British, who formed the habit of drinking black tea in the 17th century, introduced tea trees to India and Sri Lanka in the late 19th century and then to Kenya in the early part of last century.

Partly because of their long connection with Europe, those three countries still dominate the global market for black tea, which accounts for 60 per cent of all tea in the global trade.

“Unlike the Chinese, Europeans and people in the United States prefer black tea to green, and prefer teabags to loose-leaf teas,” said Wu Xiduan, former secretary-general of the China Tea Marketing Association.

Morocco, Uzbekistan, Senegal, the United States and Algeria were the top five importers of Chinese tea last year, China Customs said. European countries account for less than 10 per cent of the total volume.

Exports to Europe totalled more than 40,000 tonnes a year at the end of last century but fell to about 16,000 tonnes in 2005. They have been picking up and reached about 20,000 tonnes in recent years.

The fall is partly due to the stricter rules the European Union has adopted relating to pesticide residue, said Cai Jun, head of the department of tea, drinks and horticultural products in the China Chamber of Commerce for the Import and Export of Foodstuffs, Native Produce and Animal By-products.

“On one hand, Kenya enjoys a better natural environment and suffers less from insects, but on the other many of the tea plantations attract investment from European companies and as such are favoured in the trade.”

Go green

The International Tea Committee said that between 2001 and 2010 black tea’s share of the global market fell from 70 per cent to 60 per cent, while green and oolong teas’ combined share of the market rose from 23 per cent to 31 per cent.

China provides 80 per cent of the green tea on the global market, and last year Chinese green tea exports rose 9.2 per cent. The US imported 6,800 tonnes of Chinese green tea, 10 per cent more than in 2014, and Britain imported about 1,900 tonnes, 15 per cent more than in 2014.

The current increase in both availability and popularity in Britain is partly due to small, independent companies such as Rare Tea Co, whose sales of Chinese tea have grown 600 per cent over the past 10 years, said its chief executive, Henrietta Lovell.

Ms Lovell said: “If you were to go back to the 19th century, people were drinking masses of Chinese tea. It’s in our history to drink Chinese tea, and our tradition to source the very best, a lot of which is green tea.”

All the tea in the world was from China once upon a time but it was lost during the Second World War. The supermarkets used tea as a loss leader before teabags became routine in the 1970s and 1980s.

The Rare Tea Company has been selling Chinese tea since 2004, green whole leaf China tea from Fujian province being its bestselling Chinese tea, which is also its bestselling tea in the upmarket British supermarket Waitrose, Ms Lovell said.

“The green tea that we sell in Waitrose has been made in the same way in the same place for 300 years. It’s a handmade green tea that is made in a wok over charcoal and it’s extremely exquisite.”

Studies suggest that green tea can help lower the risk of contracting certain types of cancer, illnesses such as strokes that can cause cognitive impairment, and osteoporosis in the elderly.

And it is not just the health benefits that are prompting consumers to change their habits, but also the taste. Loose-leaf teas are now beginning to take root in places where tea bags were previously the most popular form of the beverage.

As young people care about quality, preference and provenance, Ms Lovell said, the company’s customer base is between 25 to 45 years old, and they would probably prefer to drink a craft beer rather than a can of beer.

Bethan Thomas, tea product manager for Whittard, an international retailer of coffee and tea, suggests the increase in sales is due to “improved international relations with China” as well as a rise in the British “foodie culture”.

“Jasmine is our number one Chinese tea, though gunpowder green tea is also popular. Oolong and pu’er teas are getting a lot of interest from customers. Big Red Robe (dahongpao) in particular is one that people are buying more of.”

Increasing sales and an appreciation of the quality of specialty teas such as Big Red Robe or Jasmine Dragon Pearls show that people are willing to pay more for a better quality tea, he said.

However, while tea retailers agree that people in Britain have started jumping on the Chinese tea bandwagon, the volume of sales is still quite low.

“We import 5,000 tonnes of Chinese tea, just under four per cent of our tea imports, and that figure has been fairly constant for the last 10 years,” said William Gorman, executive chairman of the Tea Infusions Association, an independent body for tea promotion. Nearly 98 per cent of tea consumed in Britain is still black tea, he said.

Even though China is the biggest producer of tea worldwide, the ever-growing Chinese population manages to “consume most of what they grow”, Mr Gorman said.

The retail price for tea in China is almost triple the price in Europe, he said, so producers have a much larger incentive to sell to the domestic market, and the fierce discounting by British supermarkets provides additional motivation to keep it in house.

Brand China

Despite being the second-largest tea exporter and the leading green tea exporter, China’s voice has gone unheard in recent years.

“In exports the profit margin is very low,” said Mao Limin, president of Zhengjiang Tea Group, China’s largest tea company and the world’s leading green tea exporter. “It is less than five per cent.”

The number of tea exporters has been rising since the government abandoned its system of quotas and licensing restrictions on tea exports in 2006, Mr Cai said. Before the reforms only a few state-owned companies were allowed to export tea, but they had little idea of brand awareness.

However, the newcomers have been engaged in a price war and lack the money to undertake promotions overseas. Of all 526 companies in China that exported the beverage last year, only 69 sold more than 1,000 tonnes overseas, Mr Cai said.

“It is a pain that we have to endure during this period of transition.”

In the other major exporters such as Sri Lanka and Kenya, the government takes a leading role in the tea industry and promoting its tea overseas, which is not the case in China, said Jiang Yong-wen, deputy head of the Tea Research Institute, part of the Chinese Academy of Agricultural Sciences.

Tea accounts for only a fraction of China’s total exports, 0.0056 per cent last year, China Customs said.

Unlike with many products, tea exports and consumption depend heavily on people’s understanding of the culture, said Sun Danwei, general manager of Beijing Wuyutai Tea, a 129-year-old brand.

“It is not only about selling tea. It’s about everything to do with tea: the drink itself, the history, even the pots used in its preparation. The Japanese are doing a better job than us.”

Ms Sun was referring to the vast numbers of tea shops and tea centres on the streets of Japan.

She acknowledged that it can be something of an effort to explain the cultural significance of tea to foreigners, but once they become interested, she said, many find it fascinating.

“The government should take full advantage of existing networks such as the Confucius institutes (government-backed organisations that promote the Chinese language and culture overseas) to push China’s tea culture across the world. The task is too difficult for individual companies to undertake right now.”